UBS upgrades Elbit Systems to “Buy” UBS raised its target price for the share to $51 from $36 Shira Horesh 1 May 07 13:23 UBS has upgraded its recommendation for Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) to “Buy 2” from “Neutral” and raised its target price from $36 to $51, 25% above its current price on Nasdaq. UBS notes, “Last week, Elbit successfully tendered for 53% of the Tadiran Communications Ltd. (TASE: TDCM) shares that it did not own. While shares are up significantly since the tender offer began, we believe that with synergies and cost savings from a consolidated sector that there is still room for substantial appreciation in the stock.”

UBS says, “Tadiran Communications’ product portfolio is complementary to Elbit’s, in our view, and we see cost synergies over time… Tadiran also has $310 million in cash on hand, so we assume essentially neutral financing from an operating perspective given the $380 million spent on the shares not already owned. Elbit has now consolidated the non-government defense sector in Israel. We believe that R&D and general and administrative savings will start to appear in the second half of 2007 and 2008 as Elbit integrates the businesses under its control.”

UBS also raised its forecasts for Elbit Systems to $2.38 earnings per share in 2007 on $1.9 billion revenue, and $3 earnings per share on $2.01 billion revenue in 2008.

Published by Globes [online], Israel business news - www.globes.co.il - on May 1, 2007